The committee also requires Sedona customers to set up a $6 million bill for the SR 179 groundwater tank

The Arizona Corporation Commission has put its stamp of approval on the Arizona Water Company’s rate increase. As of July 24th, Sedona residents are expected to cover the costs for a $6 million underground water tank, along with a mock structure above the AWC Sedona Water Storage Facility at the junction of State Route 179 and West Mallard Drive.

This rate hike means that Sedona AWC customers will see their water bills rise by approximately 45%, pushing their average monthly payment to about $60. In comparison, customers within AWC’s Northern Group will experience a lower increase of around 34%, raising their monthly bills to about $52.

“Hopefully, this can move forward as a strong message for all water companies, local governments, and residents. If any special conditions or restrictions come up based on aesthetic considerations, those extra costs may fall on us,” noted ACC Chairman Kevin Thompson. He expressed empathy for the Sedona customers, clarifying that it wouldn’t be fair for 15,000 residents from other areas to absorb the costs of those displeased with the aesthetic choices of a few.

The tank was finished this spring, designed to meet the increasing water demands of local residents. Its features include an underground capacity of 1.5 million gallons and a booster pump station capable of delivering 3,000 gallons per minute. There are, apparently, three types of underground water tanks regulated by the ACC across Arizona.

According to Senator David Marshall, residents of Sedona want the Arizona Water Company to ensure that the tank is fully underground and harmonizes with the surroundings, which, he says, could lead to an additional $4.6 million in costs. He submitted a letter to the ACC expressing these viewpoints on July 23rd.

Marshall advocated that since these aesthetic improvements benefit only Sedona, it should be the Sedona residents who bear the costs, not those from other communities, including approximately 21,700 customers served by AWC in eight different water systems. The AWC had originally claimed that those additional underground costs should be spread across all customers in the Northern Group.

“The extra costs due to the city’s requests exceed $6 million, which would not have been necessary otherwise,” the ACC remarked.

The rate increases have been attributed to AWC’s need for significant capital investments. The company’s spending on such investments has drastically risen from $5.7 million in 2010 to a planned $46 million in 2024, as indicated in a summary from AWC attorneys filed in May. They also noted that these investments mainly impact the Northern Group customers.

“Arizona needs to shift from reliance on groundwater toward more sustainable water sources,” stated a representative for the AWC, adding that customers in the Northern Group primarily rely on groundwater, and that single active management areas in Arizona usually don’t cover regions outside of their borders.

Sedona City Manager Annette Spickard had voiced her disapproval to the ACC back on March 17th, arguing against the recommendation that all underground aquarium costs be passed onto Sedona customers, resulting in higher fees from AWC.

Spickard pointed out that AWC manages nine other water storage tanks in Sedona, and many residents, some well over eight miles from the new tank, wouldn’t be benefitting directly from it. She raised concerns about the potential for unfair and arbitrary charges if Northern Group customers don’t share the costs equitably.

Moreover, she noted that many full-time residents in Sedona aren’t affluent. A good number live on fixed incomes or in manufactured homes, and that the rate hikes could pose severe financial challenges for them.